2026-04-03 20:03:41
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Anthropic just handed competitors a rare look under the hood of one of its most important products. During a software update, human error exposed roughly 500,000 lines of Claude Code-related source code, and the files were quickly mirrored across the internet.
Importantly, the leak did not expose Claude’s model weights. What spilled out was the product layer around Claude Code, including architecture details and unreleased features, giving rivals a clearer view into how Anthropic built one of the hottest coding agents in AI. Claude Code generates $2.5 billion in annual revenue, a figure that has doubled since January.
The timing is brutal. Anthropic is reportedly targeting a $380 billion IPO later this year. This lapse is especially awkward for a company that has tried to differentiate itself on safety and operational discipline.
It also comes as Anthropic fights the US government over its designation as a supply-chain risk after refusing certain military uses of its models. A federal judge has temporarily blocked that designation, but the broader clash with Washington remains an overhang.
Anthropic’s core pitch was never just model quality. It was also trust. Now it has to prove that trust can survive a very public operational failure.
Today at a glance:
👟 Nike: Topsy Turvy Turnaround
🛰️ Amazon: Delta Bets on the Underdog
🤖 OpenAI: The $122 billion Round
Nike’s February quarter looked better on the surface than underneath. Revenue was flat Y/Y at $11.3 billion ($50 million ahead of expectations), and earnings per share also cleared the consensus. But the stock still fell 15%, a sign investors remain unconvinced that the turnaround is gaining real traction.
The revenue beat deserves an asterisk. While reported revenue growth was flat, the top line actually declined 3% Y/Y in constant currency.
The bigger problem is margins. Gross margin fell to 40% as Nike leaned harder on wholesale (up 5%) and stepped back from higher-margin direct sales (down 4%). In other words, Nike’s product sales are steady, but moving through less profitable channels.
Nike is effectively trading direct sales for wholesale volume to clear inventory. While this keeps the Swoosh on shelves, it is a significant drag on the bottom line that has now persisted for six straight quarters.
International remains the bigger headache.
China sales fell 7% Y/Y as local competitors like Anta and Li-Ning continued to take share.
Meanwhile, the EMEA growth of 2% Y/Y missed estimates. The current quarter (Q4) will have to contend with the war in Iran, but Q3 results show Nike was already losing momentum in the region well before the conflict began.
North America showed a modest 3% gain, but it wasn’t enough to offset the persistent weakness elsewhere.
The weakness also goes beyond the core Nike brand. Converse revenue plunged 35% to just $264 million, another sign the company’s innovation and brand issues are broader than performance running alone.
Nike remains a ‘show me story.’ CEO Elliott Hill has been in the seat for 18 months. His comment that "the pace of progress is different across the portfolio" suggests a recovery taking much longer than anticipated. The stock just hit its lowest price since 2014, but ongoing earnings compression means it remains richly valued, well above 20x forward earnings. Until Direct stabilizes, this turnaround still looks incomplete. For now, Nike is still asking investors for patience.
The space race used to be about national pride and planting a flag on the moon. In 2026, it’s all about who can stream 4K videos at 35,000 feet.
This week, Delta Air Lines announced a massive partnership with Amazon Leo (formerly known as Project Kuiper), a low Earth orbit satellite constellation. The plan is to bring high-speed Wi-Fi to 500 aircraft starting in 2028. For Amazon, this is a critical validation of its $10 billion satellite bet.
Amazon Leo is, of course, in direct competition with SpaceX’s Starlink. The disparity in raw infrastructure is almost comical. Starlink currently has over 10,000 operational satellites and has already signed up United, Southwest, and Air France. Amazon Leo has roughly 200. That said, Amazon is authorized to launch thousands more, aiming for a total network size that could eventually exceed 7,700 satellites.
Delta CEO Ed Bastian chose an ecosystem over a pure connectivity provider. By tapping Amazon, Delta integrates with AWS to personalize seat-back screens and bring Amazon’s content and shopping library directly into the cabin.
Earlier this year, Elon Musk publicly clashed with Ryanair’s Michael O’Leary after Ryanair passed on Starlink. Delta’s move shows that as competition expands, airlines may value broader commercial alignment as much as raw satellite scale.
This deal arrives as SpaceX prepares for a historic 2026 IPO. Following its February merger with xAI, SpaceX is reportedly seeking a $1.75 trillion valuation and aiming to raise up to $75 billion. Starlink’s first-mover advantage is central to that bull case. But Delta’s decision shows Amazon does not need to match SpaceX satellite for satellite to win important customers. If AWS relationships, commerce, and content can help close the gap, the Starlink monopoly narrative starts to weaken.
OpenAI closed a staggering $122 billion funding round, catapulting its valuation to $852 billion. To put that in perspective, Sam Altman’s firm is now worth more than JPMorgan Chase and already sits among the 15 most valuable companies in the world.
OpenAI’s announcement read less like a press release and more like a draft for an IPO prospectus. The company touted:
900 million weekly active users (on track to hit 1 billion in 2026).
50 million paying subscribers.
$2 billion in monthly revenue (implying ~$24 billion ARR).
Growing 4x faster than Google or Meta did at the same stage.
Perhaps the most notable shift is in the revenue mix. Enterprise sales now account for 40% of the business and are on track to reach parity with consumer subscriptions by year-end. That helps explain the pivot to enterprise and coding.
This new war chest is meant to fund an AI infrastructure roadmap expected to require roughly $1.4 trillion over time.
The biggest checks came from three players. Amazon committed $50 billion, although $35 billion is tied to IPO or AGI milestones. NVIDIA and SoftBank each committed $30 billion.
Amazon and NVIDIA are not investing purely for financial return. They both benefit if OpenAI remains a major buyer of compute and infrastructure in a market where heavy AI spending lifts the whole ecosystem.
In a move typically reserved for public companies, OpenAI raised $3 billion directly from individual investors through bank channels and secured placement in Cathie Wood’s ARK ETFs. Bringing individual investors into the round does two things: it creates a larger base of brand evangelists and helps frame a future IPO valuation.
Still, private-market enthusiasm does not guarantee public-market upside. Plenty of companies that went public in 2022 ended up trading below their last private valuations. OpenAI may still command enormous demand when it lists, but what happens after the IPO debut is far less certain.
OpenAI now has the market cap of the incumbents and a CapEx plan that rivals the Mag 7. What it lacks is an incumbent-like cash machine. Quite the opposite: cash burn for 2026 alone is expected to exceed $14 billion.
That’s where the economics start to matter. Sacra estimates OpenAI’s gross margin was just 33% in 2025, well below the 46% target. Inference costs (the chips and electricity required to answer prompts) rose almost as fast as revenue. This is not the kind of high-margin model that powered Meta and Google in their early years.
To justify its latest valuation, OpenAI would need to generate $24 billion in profit, not in revenue. With margins like these, that points to a business closer to $250 billion in annual revenue, or about 10x today’s run rate.
That leaves little room for strategic misfires like Zuck’s Metaverse. Capital-intensive businesses cannot afford too many expensive detours, and OpenAI does not have Meta’s luxury of funding moonshots from a wildly profitable core business. The recent Sora stumble is a reminder that not every big bet will land, even with strong execution.
The $852 billion question is whether OpenAI can start generating real cash before investors start challenging the multiple.
That's it for today.
Happy investing!
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Disclosure: I own AAPL, GOOG, META, NVDA, and TSLA in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.
Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
2026-04-01 04:35:37
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🔥 The March report is here!
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We visualized 200+ companies this season:
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What to expect in this monthly report?
🚙 EVs: Rivian, Xiaomi, NIO.
💳 Fintech: StoneCo, dLocal.
🥫 FMCG: Celsius, General Mills.
😎 Tourism: Carnival, Vail Resorts.
🛢️ Energy: Aramco, Chevron, Oxy.
⚙️ Semis: Broadcom, Micron, Marvell.
🤖 AI infrastructure: Oracle, CoreWeave.
🌐 Internet platforms: Tencent, Meituan.
☁️ Workflow: Asana, DocuSign, GitLab, UiPath.
📊 Data: C3.ai, HPE, MongoDB, Rubrik, Samsara.
🛡️ Cybersecurity: CrowdStrike, Okta, SentinelOne.
👟 Consumer brands: Nike, Adidas, Lululemon, On.
📦 E-commerce: Alibaba, Sea, JD, Pinduoduo, Chewy.
🛒 Retail: Costco, Target, Best Buy, Home Depot, Lowe’s.
And more, like Accenture, Adobe, Darden, Didi, FedEx, GameStop.
2026-03-28 22:01:57
Welcome to the Saturday PRO edition of How They Make Money.
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📊 Monthly reports: 200+ companies visualized.
📩 Tuesday articles: Exclusive deep dives and insights.
📚 Access to our archive: Hundreds of business breakdowns.
📩 Saturday PRO reports: Timely insights on the latest earnings.
Today at a glance:
📦 PDD: Growth Pivot
📱 Xiaomi: Memory Crunch
🛵 Meituan: The Subsidy War
🛳️ Carnival: Energy Volatility
🐶 Chewy: Loyalty Flywheel
Temu parent PDD Holdings capped off FY25 with Q4 revenue rising grew 12% Y/Y to $17.7 billion ($0.4 billion miss), an acceleration from the single-digit growth seen earlier in the year.
The core story is Temu’s stabilization. After struggling with the end of the US de minimis tax exemption, the global bargain app regained momentum during the holiday season and now operates in nearly 100 markets. Transaction services revenue (which includes Temu) surged 19% to $9.1 billion in Q4, suggesting that PDD is successfully navigating the new tariff landscape by diversifying into Europe and optimizing its supply chain.
While growth improved, net income slid 11% to $3.5 billion ($0.52 EPADS miss). The company continued its aggressive campaign of “deliberate sacrifice” to fortify its ecosystem. Margins compress slightly for another quarter.
Management has launched a massive three-year strategy aimed at “building another Pinduoduo” by shifting focus from raw traffic to deep supply-chain integration.
Support program: PDD is pouring resources into merchant support and last-mile logistics, including a new “free delivery to villages” pilot that establishes warehouses in remote rural areas to unlock untapped consumption.
Regulatory headwinds: The quarter was not without friction. Beijing authorities deepened their probe into PDD’s accounting and tax practices following a highly publicized literal fistfight between employees and regulators in December.
Supply chain conviction: Co-CEO Jiazhen Zhao emphasized that 2026 marks a new decade for the firm, with an “all-in” mindset on supply chain investment that will continue to pressure short-term margins.
Despite the earnings miss, the stock jumped post-earnings as investors cheered the revenue acceleration and easing trade tensions. The US Supreme Court’s recent ruling against certain 2025 tariffs and the potential creation of a “US-China Board of Trade” have provided a much-needed reprieve for cross-border e-commerce.
PDD’s balance sheet remains a fortress, with cash and short-term investments climbing to ~$60 billion. Management continues to warn that quarterly profits will fluctuate as they prioritize merchant retention over short-term earnings.
2026-03-27 20:03:56
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This week, Anthropic launched a research preview that allows Claude Code and Cowork to take direct control of your computer—pointing, clicking, and typing like a human operator. Through a new feature called Dispatch, users can assign a complex task from their phone and return later to a finished deliverable on their desktop.
It follows the recent hype around OpenClaw, whose founder, Peter Steinberg, just joined OpenAI. Steinberg’s move is a clear signal that OpenAI is preparing its own response. It’s the latest display of the intensifying AI agent race. While Anthropic is doubling down on autonomous work, others can no longer afford to fall behind.
Today at a glance:
🤖 OpenAI: The End of Side Quests
🏭 Terafab: The Silicon Bottleneck
📱 Apple: Maps Turn Into Ad Space
OpenAI spent the last two years acting like it could build everything at once: the chatbot, the coding assistant, the browser, the shopping layer, the hardware device, and even a video-generation app aimed at creators and studios. That made the company look unstoppable, but also increasingly spread out.
Anthropic has been gaining ground with developers and enterprise users, especially in coding. Meanwhile, OpenAI has been juggling a growing list of products competing for the same talent, attention, and compute. Consumer experiments may generate buzz, but they do little to help if the company is heading toward an IPO and needs to show a clear path to profitability.
In recent weeks, OpenAI made clear that the era of endless experimentation may be fading. Leadership is reportedly pushing the company away from distracting side quests and back toward coding and enterprise productivity.
Here’s what that looks like in practice:
Sora App shuttered: Just six months after its splashy standalone launch, OpenAI is closing the Sora app. Despite hyper-realistic results, the resource-intensive nature of video generation has made it an early casualty of the new lean strategy.
$1 billion Disney deal collapses: The partnership, which intended to bring Disney characters into the Sora ecosystem, was officially terminated this week. It is a stark admission that the Hollywood dream is being deprioritized in favor of more stable revenue streams.
Desktop super app: Rather than maintaining fragmented products like the Atlas browser and Codex coding tool, OpenAI is folding them into a single unified desktop interface. The goal is to stop users from context-switching.
Transaction retreat: OpenAI is stepping back from owning the payment flow inside ChatGPT. Instead of handling purchases directly, it is repositioning as a product discovery and referral layer, offloading the operational complexity of e-commerce to retailers.
ChatGPT’s success has made OpenAI, as Ben Thompson put it, an accidental consumer tech company. Altman & Co. then tried to build ten startups under one roof. Now OpenAI is being forced to act less like a playground for new ideas and more like a business with a clearer center of gravity.
While apps like Sora were flashy and viral, video generation is expensive, difficult to moderate, and full of copyright landmines. When you are preparing for a possible IPO, these are the kinds of projects that get scrutinized fast. Viral clips of dogs driving cars don’t carry the same weight as high-margin enterprise seats.
That pressure is showing up most clearly in enterprise. Anthropic’s momentum with Claude Code and its $2.5 billion revenue run-rate has made the battle for workplace adoption much more urgent. OpenAI seems to have decided that the biggest prize is becoming the default software layer for work, and that changes how it thinks about resources. Every GPU spent on a side quest is one not being used to win the high-stakes battle for the developer’s desktop.
Instead of chasing every adjacent opportunity, the company now seems to be asking a simpler question: Does this help us win coding and enterprise? If the answer is no, it becomes much easier to cut, even if the project is flashy and has big-name partners attached.
For years, frontier AI companies were rewarded for launching whatever felt like a big idea. This next phase is less about proving how many cool things you can launch and more about proving you know which ones are actually worth building. OpenAI is starting to act less like an AI theme park and more like a company picking its battles. Sam Altman has already proven he is exceptional at fundraising and dealmaking. Now comes the hard part. OpenAI has to prove it can be exceptional at generating cash.
Elon Musk’s newest big idea is not a rocket or a robotaxi. It’s a chip factory. This week, Musk unveiled Terafab, a chip-manufacturing joint venture between Tesla, SpaceX, and xAI that early reports peg at ~$25 billion.
The project aims to supply the specialized compute needed for self-driving cars, humanoid robots, and a newly revealed “Orbital Data Center” system. Musk’s vision is split into two distinct lines: the AI5/AI6 series for terrestrial robotics and the D3 series, which are high-power chips hardened for the hostile environment of space.
Terafab matters because it exposes a growing reality at the center of the AI boom. The Big Three foundries (TSMC, Samsung, and Intel) cannot expand quickly enough to meet Musk’s exponential projections. As Musk bluntly put it:
“We either build the Terafab or we don’t have the chips.”
The scale is almost incomprehensible. Musk suggested Terafab will eventually span 100 million square feet—roughly 10x the size of Giga Texas—requiring over 10 gigawatts of power. Musk says bringing fabrication, memory, and packaging under one roof in Austin could create a ‘recursive design loop,’ allowing chips to be designed, printed, and tested in days rather than months. If successful, it would give Musk’s companies far more control over the chip-development cycle.
Here is what stands out from a business perspective:
The ambition is enormous: Terafab targets 1 Terawatt of annual compute. For context, analysts have argued that ambition is on the order of current relevant global semiconductor capacity.
Pivot to space-first compute: In a surprising twist, Musk says roughly 80% of Terafab’s output would eventually be dedicated to space-based AI satellites. He argues that solar irradiance is 5x stronger in orbit, potentially making space-based inference cheaper than terrestrial data centers within three years.
The xAI link-up: Terafab shows how closely xAI is becoming tied to Musk’s broader industrial ecosystem. That may strengthen the strategic logic, but it also raises fresh questions about how the spending is divided across Tesla, SpaceX, and xAI.
The cost question is unavoidable. Building a 2nm-capable fab from scratch is one of the most capital-intensive bets in industrial history. Even before reaching full scale, Terafab will pressure capital budgets that are already stretched thin.
Tesla is the most vulnerable link here. Its decline in vehicle sales and margin compression leave little room for error. While it generated $6.2 billion in Free Cash Flow in 2025, Goldman Sachs estimates that figure could turn negative in 2026.
SpaceX is currently the bank for this vision, with a potential $750 billion IPO on the horizon to fund these orbital ambitions. Skepticism remains high because chip manufacturing has moved toward specialization for a reason. NVIDIA designs, TSMC manufactures, and ASML provides the tools. By trying to pull the entire stack under one roof, Musk is betting that vertical integration can overcome decades of specialized industry expertise.
Still, Musk may be right about the broader bottleneck. If Tesla wants 10 billion Optimus robots by 2040 and SpaceX wants a million AI satellites, then chip supply stops being a procurement issue and starts becoming a fundamental constraint on the entire vision. Musk has made vertical integration look visionary before, but Terafab is a reminder that the ultimate bottleneck is the balance sheet.
Apple just found a new place to sell ads.
This week, the company announced Apple Business, a free all-in-one platform that bundles device management, corporate mail, and brand tools. The company removed the monthly subscription fees previously required for these management tools.
In other words, Apple is lowering the barrier for millions of small businesses to formalize their digital presence. This free offering functions as a customer acquisition tool for Apple's newest high-margin revenue stream: Ads are coming to Maps.
Starting this summer in the US and Canada, businesses will be able to buy priority placement at the top of Maps search results and inside a new Suggested Places feed. It is a direct page from the Google Maps playbook, launched nearly 13 years later.
The shift toward advertising is a necessity for Apple’s valuation.
Apple still makes the bulk of its revenue from Products. But Services generated $86 billion in gross profit over the last 12 months (LTM). That’s good for 42% of Apple’s overall gross profit. The gap between Products and Services is narrowing rapidly. The two lines below will eventually cross. It’s a matter of when, not if.
Apple’s Services division now operates at a 77% gross margin—nearly double the margin of the Products segment. Every dollar of local ad revenue Apple generates from a coffee shop or retailer is almost pure profit, helping insulate the bottom line as hardware upgrade cycles lengthen.
This ad push also serves as a hedge against regulatory headwinds.
For years, a massive chunk of Apple’s Services profit came from a single source: the multi-billion dollar check Google pays to be the default search engine on Safari. Analysts now estimate this payment has ballooned to $28 billion annually.
The latest antitrust rulings in late 2025 and early 2026 did not ban these payments, but they did deliver a structural wake-up call. The courts stripped away Google’s ability to demand exclusivity, meaning Apple is now legally free to promote rivals alongside Google. More importantly, the ruling forces these contracts to be renegotiated every 12 months.
For Apple, the DOJ's message was clear: you can keep the money for now, but you can no longer outsource your search destiny to a single partner. By building its own search ad ecosystem inside Maps, Apple is essentially insourcing its revenue. They are moving from renting their search traffic to Google to owning the search intent themselves.
Apple is selling local intent. Unlike an App Store search, a Maps search happens at the very end of the purchase funnel. By turning Maps into a high-margin ad platform, Apple is showing that some of its most valuable economics come not from the glass and aluminum in your pocket, but from the data on where you’re going next.
That's it for today.
Happy investing!
Thanks to Fiscal.ai for being our official data partner. Create your own charts and pull key metrics from 50,000+ companies directly on Fiscal.ai. Save 15% with this link.
Disclosure: I own AAPL, GOOG, META, NVDA, and TSLA in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.
Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
2026-03-24 20:05:20
Welcome to the Premium edition of How They Make Money.
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Robotaxis were supposed to threaten Uber.
Instead, Uber is trying to become the platform they run through.
In just a few weeks, the company has announced a flurry of partnerships across the autonomy stack — from software providers to fleet operators to vehicle manufacturers. NVIDIA. Zoox. Wayve. Motional. And the list keeps growing.
With nearly $10 billion in Free Cash Flow in 2025 alone, Uber now has the firepower to shape the future of autonomy.
The latest move came last week: a $1.25 billion investment in Amazon-backed Rivian to deploy up to 50,000 fully autonomous robotaxis by 2030.
At first glance, it looks like Uber is simply hedging its bets. But the strategy is now abundantly clear. Uber doesn’t want to build the best self-driving technology. It wants to own the marketplace around it.
And the economics behind that strategy tell a much bigger story.
Today at a glance:
🚖 Not just Rivian
🧠 Uber’s new playbook
⚖️ The hybrid advantage
📊 Who really wins here
2026-03-21 22:02:45
Welcome to the Saturday PRO edition of How They Make Money.
Over 300,000 subscribers turn to us for business and investment insights.
In case you missed it:
📊 Monthly reports: 200+ companies visualized.
📩 Tuesday articles: Exclusive deep dives and insights.
📚 Access to our archive: Hundreds of business breakdowns.
📩 Saturday PRO reports: Timely insights on the latest earnings.
Today at a glance:
🇨🇳 Alibaba: $100 Billion AI Bet
🌐 Accenture: AI Transition Continues
🚚 FedEx: Efficiency Over Expansion
🍪 General Mills: Reinvestment Pains
🫒 Darden: Strategic Shifts
🚖 Didi: Cost of Conquest
🧘🏻 Lululemon: Global Tug-of-War
✍️ DocuSign: Billings Hit $1 Billion
🏥 HealthEquity: Asset & Margin Records
🌎 dLocal: $1 Billion Milestone
Alibaba’s Q3 FY26 (December quarter) saw revenue rise 2% Y/Y to $40.7 billion ($1.4 billion miss), though like-for-like growth (excluding exited businesses like Sun Art and Intime) was a more robust 9%.
The headline story was a 67% plunge in adjusted net income, as the company doubled down on its investment phase. This aggressive spending centers on three areas: quick-commerce subsidies, user experience, and a massive build-out of AI infrastructure.
The company is effectively cannibalizing short-term retail profits to fund a full-stack AI future:
Cloud Intelligence Group: Revenue growth accelerated to 36% Y/Y, with AI-related product revenue posting its tenth consecutive quarter of triple-digit growth. CEO Eddie Wu set a bold new target to reach $100 billion in annual Cloud and AI revenue within five years. To accelerate monetization, Alibaba recently hiked prices for cloud and storage services by up to 34%.
T-Head & Token Hub: Alibaba is vertically integrating its AI via its proprietary chip unit, T-Head, which has now shipped over 470,000 AI chips. The newly formed Alibaba Token Hub (ATH) group consolidates all AI units under Eddie Wu to streamline the adoption of “Model-as-a-Service” (MaaS).
China E-commerce & Quick Commerce: While core e-commerce revenue grew 6%, the Quick Commerce segment surged 56% to ~$3 billion. This business is currently a loss leader used to defend market share against Meituan and JD.com, with a goal of hitting RMB 1 trillion in Gross Merchandise Value (~$143 billion) by FY28.
The quarter included significant headwinds. The surprise departure of Junyang Lin, a lead Qwen developer, raised questions about research continuity. In addition, while the Qwen App surpassed 300 million MAUs, the rise of agentic AI has given Tencent’s Weixin/WeChat ecosystem an early advantage.
Alibaba’s management characterized the current profit dip as a deliberate choice. They project that the Quick Commerce segment will turn profitable by FY29 and that the integration of T-Head chips will enable “non-linear leaps” in cloud profitability by reducing reliance on expensive external silicon.